Friday, January 30, 2009

Memo from General Motors

I received a note the other day from Maria at General Motors asking me to go visit GM Dealer showrooms and see if that doesn't cause me to reassess my position on the troubled car company, at present, living solely on borrowed time. Here is Maria's letter:

I work for GM, and wonder if you've visited a GM dealership recently? If not, I encourage you to test-drive award-winning vehicles like the Chevy Malibu, Buick Enclave and Cadillac CTS. Take a look at the photos of the upcoming Buick LaCrosse, Chevy Equinox, Cadillac SRX and the Cadillac Converj concept shown at the Detroit auto show last week. Vehicles like these have been extremely well received by the media and consumers, and are created for people who care deeply about beautiful design, reliable performance and fuel efficiency.Your reasoning suggests that if you're not number one, why bother. So should Pepsi slink away into oblivion because it hasn't caught up to Coke? By the way, GM led the U.S. auto industry by 750,000 vehicles in 2008, and is No. 1 in China, the world’s fastest growing market. But, eh, who’s counting, right?

So Maria, it sounds like you are another one of those corporate "younglings" (isn't that what George Lucas dubbed young Jedi in training in Star Wars - heads down, eyes covered, weilding light sabers blindly?). Maria, save yourself and don't deliver the same line I've heard from every generation of management at GM, and many other companies, for each of the last 40 years. The cars are no different and the ads all sound the same - perfect evidence that nothing's changing at GM, Ford or Chrysler. Yesterday I heard an ad about how I should buy a Cadillac because it's the product President Barak Obama is driven in.

Maria, do you have one of those coffee cups on your desk with the handle inside the mug? If you do, you will find the words "bass ackwards" imprinted on the inside bottom when you finish your coffee or tea. GM (and Ford and Chrysler) you've got it all (as Sean Connery would say in the Hunt for Red October) all wrong. You don't make what YOU want then use dealers, PR and advertising to tell us it's what we want. It's bass ackwards and all wrong.

How easy it is to turn potentially bright minds to the dark side and away from the force (known as Common Sense)

Thanks Maria. But I did visit GM dealerships yesterday anyway, and what I found did nothing to change my mind. I am what you now call a trier rejector. All I found was this year's version of last year's news - which for example is why portholes remain potholes at Buick and why Pontiac's positioning continues to suffer from pubescent development lag disease. (Pontiac is still making cars for adult teenagers who never matured mentally. In terms of age they may be adults but in terms of what appeals to them, they are old tweens. The experience? Completely uneventful. And no wonder. It takes about 5 years to get a car from concept to production/3 years on the fast track. Since GM was on the skids, a position well hidden back then, what's on the floor now and for the next couple of years will be, well, ho hum. Guaranteeing that the government bailout money will run out well before GM effects a turnaround - making it even dumber for ex-President Bush to give them some pocket change in the first place. I'd start sending out my resume Maria.

What's GM's best option? Stop manufacturing cars. License the names Toyota wants to Toyota. Let Toyota manufacture and market the cars and GM can collect a fee. This way, GM can cancel all the union contracts and the workers can earn a decent $48 an hour working for Toyota rather than the $78 at GM. Let GM and Mr. Goodwrench snap up hundreds of Jiffy Lube locations across the country and provide maintenance services. Like the name says, General Motors products are well, just too general, but I think they can do repairs on commodity vehicles very well. I've always liked their service and parts people anyway. GM hasn't done much to devastate my perception of them.

What's my solution for the US auto industry Ford, GM and Chrysler? Lump the three companies together in one company, get rid of the CEOs and Boards, bring in Costco's Jim Sinegal to manage the companies and make certain that the products offered meet Kirkland's brand standards. Sell the cars through Costco as well. No one likes dealerships anymore. By the way, Sinegal isn't a payroll hog either. He's quite humble and effective. And no, I'm not Jim Sinegal's talent agent.

Thursday, January 22, 2009

General Motors Pisses On Consumers Again

As part of the agreement made by Ex-President Bush to give General Motors part of an industry $17 billion bailout The Associate Press reports General Motors has yet to clean house of dunderheads who forget to engage brains before opening mouth.

According to an Associated Press article which sites GM's loss of the number one auto sales position to Toyota GM's Executive Director of global market and industry analysis Mike DiGiovanni downplayed the significance of the drop to number two saying the automaker is focused on profitability rather than sales volume. "I don't think being number one in vehicle sales means all that much at all to the American consumer. I think what matters most to the is consumer is strong brands and strong products..."

Jesus Mike! How do you have strong products and brands if you're not number one? Those are the strong products and brands! This statement is about as intelligent a move as your CEO flying to DC on a private jet asking for a handout. Seriously. It's in the same league. Did your PR department approve this statement before you let fly? Are your advertising agencies reviving an Avis like "We try harder" campaign? Mike, this type of thinking is why GM stock was trading around $3.50 yesterday. Oh, that's right Mike, I forgot. It's OK to say stupid things that influence consumer perception by telling us being a winner isn't important. Or did you never learn that Americans love winners? Your excuse for being stuck on stupid? ...GM is a penny stock company and penny stock companies don't employ the best, the brightest or those with much common sense. That's why they're penny stocks instead of corporate leaders. I won't even have to look today to know GM stock selling even lower.

But this type of gaff reminds me of another GM story years ago when GM hired a Deputy Director of the US Census named Vince Barabba to come in and give the company "a voice of the consumer." Vince met me in his office to explain he believed there was "a market for people who wanted cars that didn't look good." I had to ask Vince to repeat the objective of that new product assignment before I graciously declined to participate. I left. Vince stayed. Vince didn't last long at General Motors and neither did his Chevy Lumina.

If GM was Dorothy in The Wizard of Oz do you think they and CEO Rick Wagner wake up each morning tapping their heels together saying, "It's not about sales. It's not about sales."